Ahead of tomorrow’s clash in the last 16 of the 2015/2016 UEFA Champions League, the KPMG Football Benchmark team compares the off-pitch performance of the Italian and German national champions, namely Juventus FC and FC Bayern Munich. Although these two clubs have respectively won the last four Italian and three German domestic titles, their financial performances are at very different levels.
FC Bayern Munich, ranked 5th in Europe in terms of revenues vs. Juventus FC in 10th position, have better figures in all but one of the financial and operational parameters analysed in this article, namely broadcasting revenues.
In fact, in the football season 2014/2015, Juventus FC accrued 85% more in broadcasting rights than Bayern (EUR 197 million vs. EUR 106 million). The reason for this significant difference is twofold. Firstly, the Bianconeri, unlike Bayern, reached the UEFA Champions League final in 2015, receiving EUR 41 million more than the Bavarians from UEFA. Secondly, Germany’s Bundesliga generates the lowest of the ‘big five’ leagues in terms of TV rights income. The collective deal was worth EUR 615 million in 2014/2015, 30% lower than that enjoyed by Italy’s Serie A. Consequently, Juve’s TV income is nearly double that of Bayern.
Despite an increase in ticket prices following the opening of the new Juventus Stadium in September 2011, which has resulted in matchday revenue growing by 61%, the Italian club still cannot compete with the 73,000 average domestic league attendance at FC Bayern Munich matches, which is almost double that of FC Juventus. This result is primarily due to the higher capacity of the Allianz Arena (75,000) in comparison to the Juventus Stadium (41,475).
Another area in which FC Bayern Munich also show significant dominance is commercial income, their gains here being almost four times higher than those of the “Old Lady”. While both clubs showed a slight decrease from the previous year, the German giants have recorded a 44% increase since the 2011/2012 season, much higher than the 9% increase of their opponents this week. Bayern also see higher shirt revenues, both from kits and commercial sponsors: they have an annual deal with Adidas worth EUR 25 million and another worth EUR 30 million per year with Deutsche Telekom, compared to an annual EUR 23 million deal with Adidas and an annual EUR 17 million with Jeep at Juventus FC.
Bayern’s ability to attract more lucrative deals also seems to match their level of fan engagement, with approximately 13 million more global Facebook followers than Juve. Although FC Bayern Munich is one of the European clubs with the strongest digital media presence in China, including a new online fan shop and a dedicated app for the Chinese market, it is important to state that both clubs are still way behind teams such as Real Madrid CF and FC Barcelona, who respectively have 87 million and 90.5 million Facebook followers.
Both clubs are currently profitable. Juventus FC have reported their second pre-tax annual profit in a row, while FC Bayern Munich have accrued almost EUR 100 million combined profits over the last four seasons. This means that both clubs are compliant with UEFA Financial Fair Play Regulations, both with sustainable staff costs/revenue ratios, at a healthy 61% and 48% respectively, well below the recommended 70% threshold.
With the ability to select 5 World Cup winning players and 11 players from the UEFA Champions League winning squad of 2013, Bayern field a football squad with a considerably higher market value: EUR 579 million vs. EUR 380 million.
So, with FC Bayern Munich arguably at the top of world football, with five UEFA Champions League trophies, operating revenues close to the EUR 500 million threshold and a stable profitable trend, the club are enjoying a self-reinforcing cycle of on-pitch success driving off-pitch success, and vice versa. Although the Bavarians are still improving their commercial structure, seeking to pen new deals with regional partners around the world, a major revenue upside could well be achieved through the sale of media rights. In fact, Bayern and other German clubs require the Bundesliga to negotiate more profitable agreements with broadcasters to close the gap on their international peers.
On the other hand, the road ahead for Juventus FC seems tougher. While for both matchday and broadcasting income the market looks almost saturated, the commercial line figures suggest that the club could do more - and steps are being taken. For the first time, the club will directly manage its own licensing and retail operations, opting out of the fixed EUR 6 million per year clause with Adidas, and demonstrating a clear intent to earn more from these sources. In order to compete commercially, besides signing new deals with global and regional partners, Juve are also starting to leverage on their international fan-base, through the launch of a new digital platform.
The club also toured internationally in recent seasons in order to establish a presence in potentially lucrative markets, including Indonesia. Furthermore, the “Continassa project” will see the redevelopment of the urban area around the Juventus Stadium in Turin. A new headquarters for the club, along with concept stores, a hotel, restaurants and residential real estate are all to be integrated into the surrounding of the stadium. This investment will be fundamental in boosting commercial income and in diversifying the club’s revenue streams.
Looking only at their recent off-pitch records, the match between Juventus FC and FC Bayern Munich may be imbalanced, but the upcoming 2-leg clash could go either way – games of this magnitude require team chemistry, resilience, desire to win and some degree of luck on the day.
The Football Benchmark Team of KPMG Sports Practice can undertake further analysis of football industry data for you. The subject matter experts within the group can also assist stakeholders to assess and interpret the potential impact on their organisations suggested by the results of particular pieces of research and to identify reasons why a specific trend is being observed or to assess potential solutions and future scenarios.
 FC Bayern Munich reached the UEFA Champions League semi-finals last year. The difference in UEFA distributions is also due to the market pool system, which awarded Juventus FC a bigger slice of the pie. The Bianconeri, indeed, were the only Italian club with AS Roma to take part in the Group Stages. Furthermore, the Giallorossi did not advance to the next round while, by contrast, all four German clubs did, diluting Bayern’s share.